Greeks on buying spree to get assets that retain value

A woman looking at goods displayed for sale inside a one-Euro shop in Athens.
A woman looking at goods displayed for sale inside a one-Euro shop in Athens.PHOTO: REUTERS

MAROUSI (Greece) • Business has been so brisk in the giant Kotsovolos appliance and electronics store in this upper-middle-class suburb of Athens that you might think a sale was on.

But, no, it is panic buying, those who work here say.

Increasingly concerned that greater economic trouble lies ahead of them, and limited in how much cash they can take out of banks, Greeks have been using their debit cards to buy ovens, refrigerators, dishwashers - anything tangible that can hold its value in troubled times.

"We have sold so many," said Ms Despina Drisi, who has worked in the store for 12 years. "We even sold display models. We're spacing things out now to cover the holes on the shelves."

To the casual observer, the bustle of everyday life looks unchanged here.

FEAR OF LOSING SAVINGS

Panicked doesn't begin to describe how people feel.

MR ANTONIS MOUZAKIS, an Athens accountant

But beneath the surface, Greeks are struggling with growing fear, the strange ramifications of closed banks and the mounting potential for much worse.

They could face the unknown consequences of being pushed out of the euro zone within the next week if Greece and its creditors cannot come to an agreement.

Many are doing what they can to protect themselves financially, buying appliances and jewellery or even prepaying their taxes so they will have taken care of one financial obligation if they end up losing some of their savings to a bank failure, as happened to depositors in Cyprus under a bank rescue plan there in 2013.

Depositors with more than €100,000 (S$149,600) had lost about 40 per cent of their money.

"Panicked doesn't begin to describe how people feel," said Mr Antonis Mouzakis, an Athens accountant. "I have a huge number of customers wanting to file their taxes right here, right now... even if the tax is €40,000 to €50,000."

A Greek jeweller, Mr George Papalexis, said a customer approached him on Wednesday wanting to buy €1 million worth of merchandise. But Mr Papalexis, the chief operating officer of Zolotas, said he had refused because he was more comfortable holding on to the jewels than having money in Greek banks.

"I can't believe that there I was, turning away a million-euro offer," he said. "But... it's a measure of the risk we face."

With banks closed, Greeks are limited to withdrawals of €60 a day from ATMs and cannot make international transactions, factors that have gutted some businesses already.

Some businesses have begun yet another round of layoffs. Pharmacists began to feel the pinch almost immediately when the banks shut down because most drugs are imported and they had no way to pay for them.

A contractor at a Greek energy company, who spoke on the condition of anonymity, said his firm paid all its taxes for the year last week to whittle down the funds that could be subject to a deposit tax.

"I'm even thinking about buying a car, although I don't need one, to get my cash balance lower," he said. "People want their money in physical assets, not in the bank."

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on July 10, 2015, with the headline 'Greeks on buying spree to get assets that retain value'. Print Edition | Subscribe